Whether or not retail punters are best served by direct market access or a market-maker model is a debate that could go on ad infinitum. Both types of service have merits and they both have drawbacks; I think it is healthy to have the choice rather than to have one of them mandated.
Clearly, there have been issues with retail investors not only losing money, but getting ripped off. South Korea took steps to prick the retail FX bubble earlier this year (see South Korea ups margins after retail surge), and one of the ways it is addressing the issue is to allow securities brokers to offer margin FX.
This week, Leading Investment & Securities became the first to do so when it announced such a service using a DMA model. The company’s FX offering will be in partnership with Advanced Markets, which is a designated US Futures Commission Merchant and Forex Dealer Member that provides DMA to rates streamed by various banks.